We have examined the ability of dexamethasone, retinoic acid, and vitamin D3 to induce osteogenic differentiation in rat marrow stromal cell cultures by measuring the expression of mRNAs associated with the differentiated osteoblast phenotype as well as analyzing collagen secretion and alkaline phosphatase activity. Marrow cells were cultured for 8 days in primary culture and 8 days in secondary culture, with and without 10 nM dexamethasone or 1 microM retinoic acid. Under all conditions, cultures produced high levels of osteonectin mRNA. Cells grown with dexamethasone in both primary and secondary culture contained elevated alkaline phosphatase mRNA and significant amounts of type I collagen and osteopontin mRNA. Addition of 1,25-dihydroxyvitamin D3 to these dexamethasone-treated cultures induced expression of osteocalcin mRNA and increased osteopontin mRNA. The levels of alkaline phosphatase, osteopontin, and osteocalcin mRNAs in Dex/Dex/VitD3 cultures were comparable to those of 1,25-dihydroxyvitamin D3-treated ROS 17/2.8 osteosarcoma cells. Omitting dexamethasone from either primary or secondary culture resulted in significantly less alkaline phosphatase mRNA, little osteopontin mRNA, and no osteocalcin mRNA. Retinoic acid increased alkaline phosphatase activity to a greater extent than did dexamethasone but did not have a parallel effect on the expression of alkaline phosphatase mRNA and induced neither osteopontin or osteocalcin mRNAs. In all conditions, marrow stromal cells synthesized and secreted a mixture of type I and III collagens. However, dexamethasone-treated cells also synthesized an additional collagen type, provisionally identified as type V. The synthesis and secretion of collagens type I and III was decreased by both dexamethasone and retinoic acid. Neither dexamethasone nor retinoic acid induced mRNAs associated with the chondrogenic phenotype. We conclude that dexamethasone, but not retinoic acid, promotes the expression of markers of the osteoblast phenotype in cultures of rat marrow stromal fibroblasts.